Limited Rec community memberships lead to revenue loss

A university official estimated a 25 percent decrease in the University Recreation Center’s annual revenue as a result of a limit placed on community memberships at the Recreation Center in January 2009, noting however that student employees and student memberships will not be affected.

Director of Campus Recreation Steve Kintigh said the hours and pay of student employees will not decrease as a result of the expected revenue loss, about $200,000 a year. The only consequences students will see is less new equipment and fewer student development activities sponsored by the Recreation Center.

Some Recreation Center student employees said that they are not allowed to talk on the record about the community memberships but said that their hours and pay had not changed since the decrease in members.

The changes in Recreation Center membership policies were necessary to comply with Internal Revenue Service regulations that state that a private university, funded by tax-exempt bonds, is limited to 5 percent private use, Kintigh said. Private use at the University Recreation Center includes any members other than students and faculty who choose to gain membership.

At the time university officials learned of the IRS law, the Recreation Center was operating at about 9 percent private usage, Kintigh said.

In order to bring the Recreation Center into compliance, Kintigh said, university officials eliminated 800 memberships, including all 500 children’s memberships.

Previously, children under the age of 18 could purchase a membership and use the Recreation Center with the supervision of an adult member. Under the current policy, children are still allowed to use the Recreation Center for a $5 fee per visit during family hours and with the supervision of a parent or guardian.

The university stopped selling new community memberships and froze community memberships that had not been renewed since Jan. 1, 2009, Kintigh said. There are currently 182 community members, and the Recreation Center is not selling more community memberships, Kintigh said. The monthly payment option was eliminated, but all monthly members were allowed to join the annual payment option, which costs $700.

University officials originally planned to deny membership to recent alumni to comply with IRS regulations, Kintigh said.

“The hardest thing for me was to tell the students who just graduated, ‘I’m sorry; we don’t have any spaces,'” he said.

However, after the university cut community memberships, there was enough of a margin that slashing alumni membership was not necessary, Kintigh said. There are currently 300 alumni members. Annual alumni memberships are $500 and are available to anyone who graduated from the university. If in the future the number of alumni memberships approaches the 5 percent limit, the Recreation Center will notify alumni members that they must stay current on their dues or lose their membership, Kintigh said.

IRS regulations on private use are meant to allow companies in the area providing similar services the ability to compete with the facility funded by tax-exempt bonds, Kintigh said.

Jody Norman, owner of Jody’s Gym located in Westcliff Center, said he had seen an increase in membership since January 2009.

Some of his members had come from the university, he said, but he could not link the increase to the university’s reduction in community memberships.

Some private universities do not offer recreation membership to anyone not currently affiliated with the university.

Jeff Walter, assistant director for Campus Recreation Facilities at Baylor University, said Baylor’s recreation center only offers memberships to students, faculty, staff and their spouses. The size of the facility and number of machines available would not be adequate if the recreation center was opened up to community members, he said.

“Current Baylor ID holders use the facilities in high numbers, and they take priority,” Walter said.

Baylor University has never offered community memberships, but officials are aware of the regulations on private universities, Walter said. It is unlikely that Baylor will offer the memberships in the future, Walter said, because of the possibility of having to end the sale because of limited facility space or inconvenience to students.

University Recreation Center – Community and Alumni Membership Numbers

800: number of community memberships eliminated in 2009, including all 500 children’s memberships

182: current number of community memberships

300: current number of alumni memberships

$700: cost per year of one community membership

$500: cost per year of one alumni membership